RELATIONSHIP SELLING: ITS EFFECTS ON SALESMAN PERFORMANCE IN SERVICE INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

For any company wanting to be successful in business, it is of the utmost importance tobe able to identify and validate the salesperson characteristics and behaviorspredictive of high performance in selling. In line with this thinking, a vast number ofstudies have been conducted in relation to selling behaviors, their individual andorganizational antecedents, and salesperson performance (e.g. Franke and Park 2006;Guenzi, De Luca and Troilo, 2011;Plouffe, Hulland and Wachner, 2009).

Salesperson goal orientations have been found to be among the key drivers ofvarious salesperson behaviours and selling performance. They refer to the individualdifferences in goal preferences in achievement situations (Dweck and Legett, 1988; Kohli, Shervani and Challagalla, 1998) and can be divided into two major classes,namely learning goal orientation which involves seeking to develop competence byacquiring new skills and mastering new situations, and performance goal orientationwhich involves seeking to demonstrate and validate one’s competence to others(Dweck and Legett, 1988). During the last two decades, their key antecedents andoutcomes have been established in the context of selling (see Sujan, Weitz and Kumar, 1994; Harris, Moven and Brown 2005;Ahearne, Lam, Mathieu and Bolander, 2010).

However, a closer look at the salesperson goal orientation studies reveals some keygaps and inconsistencies in the goal orientations performance relationship.First, goal orientation studies have produced mixed findings related to therelationship between learning orientation and performance, ranging from clear positiverelationships (e.g. VandeWalle, Brown, Cron and Slocum; 1999) to no relationship (e.g.Kohli et al. 1998). Further, several studies have found that contrary to theory,performance orientation explains salesperson performance better than learningorientation (e.g. Porath and Bateman, 2006). Some studies have suggested and alsoprovided evidence to support the idea that the interaction between time and goalorientations might resolve these inconsistencies (Ahearne, Lam, Mathieu andBolander 2010). Kohli et al. (1998) argued that learning orientation might not affect ormight even hamper selling performance in the short term, but increase performance inthe long term by enabling salespeople to develop their skills. The gaps in findings andthe related propositions indicate that the largely unexplored question of the effect ofsalespersons’ selling experience on goal orientations should be studied more closely.

Secondly, studies have to date mostly concentrated on the direct key antecedentsand outcomes of goal orientations. Scholars have recently called for new studies onselling that examine alternative types of relationship, including mediation andmoderation, for a better understanding of the interrelations between selling behaviorsand the mechanisms how they affect performance (see Plouffe, Hulland and Wachner2009). As goal orientations concern the mental framework that individuals use tointerpret and respond to achievement situations (Dweck and Legett, 1988) and relateclosely to learning, it is likely that they can affect selling behaviors not only directly butalso through interaction, for example by helping salespeople adapt their selling stylemore effectively. Ignoring these potential indirect effects can lead to underestimation ofvarious goal orientations’ role in selling performance indicating the need to study thetopic more closely. Further, prior studies have found only little evidence of moderatorsof adaptive selling this far underlining the relevance of the taken perspective (seeFranke and Park, 2006).

This study seeks to fill the identified gaps in research on selling goal orientation bycreating new understanding of nexus between relationship selling and salesman performance in the Nigerian service industry with particular emphasis on the banking sector.

1.2       Statement of the Problem

Salespersons are widely considered as a dynamic power in the business world and their efforts has a direct effect on the various and different activities of organizations. They introduce the products of organizations to their customers. In the opinion of customers, the salespersons are representatives of the organization. The survival of service firms like banks depends on their interaction with the environment. Providing high quality service and rely solely on expertise is not enough in the banking industry, especially in the highly competitive country where the banking services abound. It is very difficult for bank marketers to use the service knowledge, as the only weapon (Wong et al, 2008). Customer satisfaction and adaptive selling behaviors are very important variables relating to banking services affecting the salespersons' performance directly or through customer orientation (Singh, 2012). Banks are to provide good services for their clients and this effort is summarized in the performance of their salesperson. The more competitive and uncertain the environment is, the more the importance of investigating the salespersons' performance and its improvement will be (Keillor and Parker, 2000). Therefore, this study is to investigate the factors affecting the performance of salespersons. According to previous studies, the salespersons' performance is a function of job satisfaction, adaptive selling behaviors, customer orientation and service history (Kotler and Keller, 2006; Singh and Das, 2013). Some studies have examined the impact of job satisfaction, customer orientation and adaptive selling behaviors on sales performance (Frank and Park, 2006; Bloes, 2001; O'Hara et al, 1991), but few studies have examined the impact of selling experience (O'Hara et al, 1991; Siguaw and Honeycutt, 1995; Singh and Das, 2013). The purpose of this study is to fill this gap in the literature of relationship selling and salesman performance and by extension to investigate the moderating role of selling experience and job commitment on these relationships. By investigating the effect of selling experience on these relationships, we can get to some clues about the relationship between sales performance and key affecting factors that provides useful implications for managing and improving the performance of salespersons.

1.3       Objectives of the Study

The general objective of this research is to understudy the nexus between relationship selling and salesman performance in service industry in the Nigerian economy:

a)         To understand the practice of relationship selling and effects on sales performance in the Nigerian banking industry.

b)         To show the effect of relationship selling on clients retention in the industry.

c)         To understand the peculiarities of banking sector in usage and strategizing with relationship selling

d)         To evaluate the moderating role played by sales experience in linking relationship selling and sales performance in the Nigerian banking industry.

e)         To show the effects of relationship selling on general performance of banks in terms of market share improvement

1.4       Research Questions

The following questions would be put forward to help the achievement of the objectives of this research work:

a)         What is the level of practice of relationship selling and effects on sales performance in the Nigerian banking industry?

b)         What is the effect of relationship selling on clients’ retention in the industry?

c)         What are the peculiarities of banking sector in usage and strategizing with relationship selling?

d)         What are the moderating role played by sales experience in linking relationship selling and sales performance in the Nigerian banking industry?

e)         What are effects of relationship selling on general performance of banks in terms of market share improvement?

1.5       Research Hypothesis

H₀₁:      Relationship selling has no significant effect on clients’ retention in the banking industry.

H₀₂:      The banking sector possesses no form of significant peculiarities in the usage and strategizing with relationship selling.

H₀₃:      Sales experience plays no significant moderating role in linking the relationship selling and sales performance in the Nigerian banking industry.

H₀₄:      Relationship selling has no significant effect on the general performance of banks in terms of market share improvement.

1.6       Justification/Significance of the Study

This study will be relevant in so many ways.  Firstly, it will be relevant in the sense that it will provide the basic understanding of the concept of relationship selling and organisational performance with particular emphasis on the Nigerian banking industry. This understanding will help all stakeholders in financial market to make good policies regarding marketing and selling their product or services. To this end, it will be beneficial to the following interest holders:-the researcher, the general public, the academic world, small-scale business owners or managers and the government.

The research work will give the researcher an in–depth understanding on the concept of relationship selling and salesperson performance.

The dynamics of relationship selling and salesperson performance is a field which seems elusive thus; it is not understood by many. This research work will enlighten people on the concept so that both customers and marketing executive alike can explore and make their relationship better off in the Nigerian banking industry.

This research work will definitely add to existing body of knowledge. It can also serve as a reference material and topic for further research work.

The government will also benefit from this work as various government agencies or regulatory bodies such as the Central Bank of Nigeria, Securities and Exchange Commission amongst other can ensure that the interests of the entire Nigerian populace are protected through various forms of relationship selling.

1.7       Scope and Limitation of the Study

As regards geographical scope of this work, the work will be centered on the Nigerian economy with particular emphasis on the banking industry. The banking industry as used here refers to any economic activity that is carried on by firms licensed to transfer funds from the surplus unit of the economy to the deficit unit of the economy.

In terms of context, this work will attempt to consider the factors and other matters that pertain to relationship selling and salesman performance in the Nigerian banking industry. Thus, other unrelated activities of the Nigerian banks might not be reflected completely unless they have a bearing on the research objectives.

In the course of this study, it is very possible that there would be certain constraints or limitations. One of such limitations include the fact that due to scope of the research work, the researcher might be limited pertaining the depth of literature and other concerns that relates to the banking industry as the researcher would have to concentrate on matters that bother on bank bankruptcy.

1.8       Definition of Terms

Personal selling:Oral presentation that takes place between a salesman and one ormore potential customers with the objective of closing the sale.

Relationship selling:All selling activities directed toward establishing,developing, and maintaining successful relational exchanges between thesalesperson and the customer –either an organization or an individual–, and,in turn, between the selling and the buying companies. Also, this approachrequires the ongoing satisfaction of the customer needs, both those related tothe product as well as the interaction.

Sales performance:Sales performance is the measurement of the number of sales that an employee makes for a business. Sales performance looks at the amount of sales made versus the amount of customers an employee comes in contact with.

Service industry: The service industries involve industries pertain the provision of services to businesses as well as final consumers.

Sales management: involves planning the sellingprogram and implementing and controlling thepersonal selling effort of the firm.

Salesforce assessment: involvesdetermining whether or not salesobjectives were met and whetheraccount management policies werefollowed.

Interpersonal skills: refer to mental and communication algorithms applied during social communication and interaction to achieve certain effects and results

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